米什金货币金融学(商学院版)第8章课件

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8.2 Transaction Costs and Financial Structure Transaction costs hinder flow of funds to people with productive investment opportunities Financial intermediaries make profits by reducing transaction costs 1. Take advantage of economies of scale Example: Mutual Funds 2. Develop expertise to lower transaction costs Explains Fact 3
2. Issuing marketable debt and equity securities is not the primary way in which businesses finance their operations 3. Indirect finance is many times more important than direct finance 4. Financial intermediaries, particularly banks, are the most important source of external funds used to finance businesses.
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FIGURE 1 Sources of External Funds for Nonfinancial Businesses: A Comparison of the United States with Germany, Japan, and Canada
Source: Andreas Hackethal and Reinhard H. Schmidt, “Financing Patterns: Measurement Concepts and Empirical Results,” Johann Wolfgang Goethe-Universitat Working Paper No. 125, January 2004. The data are from 1970–2000 and are gross flows as percentage of the total, not including trade and other credit data, which are not available.
2. Government regulation to increase information
Explains Fact 5 Government have laws to force firms to adhere to standard accounting principles that make profit verification easier. They also pass laws to impose stiff criminal penalties on people who commit the fraud of hiding and stealing profits. Partly effective.
• Separation of ownership and control of the firm
– Managers pursue personal benefits and power rather than the profitability of the firm
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8.4.2 Tools to Help Solve Adverse Selection Problem
1.Private Production and Sale of Information Free-rider problem interferes with this solution 2.Government Regulation to Increase Information Explains Fact 5 3.Financial Intermediation A. Analogy to solution to lemons problem provided by used-car dealers B. Avoid free-rider problem by making private loans Explains Fact 3 and 4
8.4.1 Lemons Problem in Securities Markets 1.If can’t distinguish between good and bad securities, willing to pay only average of good and bad securities’ values. 2. Result: Good securities undervalued and firms won’t issue them; bad securities overvalued, so too many issued. 3. Investors won’t want to buy bad securities, so market won’t function well. Explains Fact 2 and Fact 1. Also explains Fact 6: Less asymmetric information for well known firms, so smaller lemons problem
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Eight Basic Facts (cont’d)
5. The financial system is among the most heavily regulated sectors of the economy 6. Only large, well-established corporations have easy access to securities markets to finance their activities 7. Collateral is a prevalent feature of debt contracts for both households and businesses. 8. Debt contracts are extremely complicated legal documents that place substantial restrictive covenants on borrowers
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8.3 Asymmetric Information
Adverse Selection: 1. Before transaction occurs 2. Potential borrowers most likely to produce adverse outcomes are ones most likely to seek loans and be selected Moral Hazard: 1. After transaction occurs 2. Hazard that borrower has incentives to engage in undesirable (immoral) activities making it more likely that won’t pay loan back
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4.Collateral and Net Worth -- Collateral, property promised to the lender if the borrower defaults, reduces the consequences of adverse selection because it reduces the lender’s losses in the event of a default. Explains Fact 7 • --Net worth, the difference between a firm’s assets and its liabilities, can perform a similar role to collateral. • “Only the people who don’t need money can borrow it!”
Chapter 8
An Economic Analysis of Financial Structure
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Sources of External Finance in U.S
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• Agency theory analyses how asymmetric information problems affect economic behavior
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8.4 Adverse Selection and Financial Structure
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Principal-Agent Problem: Solutions
1. Monitoring: production of information
But the monitoring process can be expensive in terms of time and money. And the free-rider problem decreases the amount of information production.
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8.1 Eight Basic Facts
1. Stocks are not the most important sources of external financing for businesses
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8.5 Moral Hazard in Equity Contracts
• Called the Principal-Agent Problem
– Principal: less information (stockholder) – Agent: more information (manager)